FPC Exam Fundamental Payroll Questions & Answers 2024, Exams of Nursing

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Answers 2024

668-W - Correct Answers ✅Notice of Levy on Wages, Salary, and Other Income 1096 - Correct Answers ✅Annual Summary and Transmittal of U.S. Information Returns Under the FLSA how old must a minor be to be employed? - Correct Answers ✅ 14 What is the FUTA tax rate? - Correct Answers ✅6.0% On form 941, the employer reports - Correct Answers ✅Social Security Wages What is the formula for calculating an employees net pay? - Correct Answers ✅Gross pay-deductions for taxes- other deductions Which plan discriminates in favor of highly compensated employees? - Correct Answers ✅Nonqualified deferred compensation plans What is the federal minimum wage per hour on January 1, 2018? - Correct Answers ✅$7.

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What law determines time limits with which employees must be paid after wages are earned? - Correct Answers ✅State Laws Cafeteria plans are authorized by what internal revenue code section? - Correct Answers ✅ 125 The direct deposit data sent to the bank after payroll processing is an example of - Correct Answers ✅Interface What taxes, if any, must be withheld from payments to an independent contractor who provided a tin? - Correct Answers ✅No taxes are withheld An external audit: - Correct Answers ✅Allows an objective assessment of the financial statements. Employees' privacy rights are governed by all of the following except: - Correct Answers ✅Local Legislation Under the FLSA, what basis is used to determine whether a non-exempt employee is to be paid overtime? - Correct Answers ✅Hours worked in a work week

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Overtime payments are included in the calculation of what tax, if any? - Correct Answers ✅They are included in all tax calculations What is the 2018 wage base for social security tax? - Correct Answers ✅$128,400. If an employee does not have federal tax withheld and has not claimed exempt, what must the employer do? - Correct Answers ✅Provide the employee with the EITC notice A computerized payroll system can help a payroll dept. accomplish all of the following tasks except: - Correct Answers ✅Recognize changes in laws and regulations An employee's profit sharing bonus is payable in the year following his death. How should the bonus be taxed and reported? - Correct Answers ✅Withhold no taxes and report the bonus on for 1099-misc. In what ways can a computerized system increase the accuracy of employees paychecks? - Correct Answers ✅By reducing human error What federal taxes must an employer withhold from an employees reported tips? - Correct Answers ✅Federal income, social security and medicare tax

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The main purpose of batch controls is to - Correct Answers ✅Validate data entry accuracy Which of the following types of compensation is taxable? - Correct Answers ✅Backpay awards What is used when calculating an employee's gross up? - Correct Answers ✅Net set Employees can provide their employer with their marital status and allowances for income tax withholding purposes by: - Correct Answers ✅Completing form W- Generally, what is the largest expense for most companies? - Correct Answers ✅Salaries and benefits What authority controls the frequency with which employees must be paid? - Correct Answers ✅State Laws What is the general ledger? - Correct Answers ✅A record of transactions by account

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What, if any, is the 2018 wage base for Medicare tax? - Correct Answers ✅There is no limit An employer should remind employees to complete an amended W-4 if they have any changes in status by - Correct Answers ✅December 1 of each year If an employee provides an invalid W-4, the employer must: - Correct Answers ✅Refuse to accept the form Under the FLSA, an employees workday is defined as the: - Correct Answers ✅time the employee is performing principle activities Under the FLSA, rounding must - Correct Answers ✅be consistent An exempt employee under the FLSA is exempt from - Correct Answers ✅both minimum wage and overtime Who verifies eligibility to work in the US? - Correct Answers ✅Employer

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Under the FLSA, what type of pay is included in a non-exempt employee's regular rate of pay calculation? - Correct Answers ✅Production Bonuses When does an exempt for W-4 expire? - Correct Answers ✅February 15 of the next year A commission is included in the tax calculation of which tax, if any? - Correct Answers ✅All Federal Taxes For a tipped employee to be paid $2.13 per hour, what is the minimum amount of tips the employee must receive each month? - Correct Answers ✅$30. The definition of disposable earnings for a creditor garnishment is - Correct Answers ✅Gross wages less all deductions required by law What is the minimum amount of tips an employee reports each month to requires an employer to withhold federal taxes from employees tips

• Correct Answers ✅$20. Qualified transportation fringe benefits are subject to what taxes, if any? - Correct Answers ✅No federal taxes

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How frequently must an employer include noncash fringe benefits in an employees income? - Correct Answers ✅Annually SS-5 - Correct Answers ✅Application for a Social Security Card W-4 - Correct Answers ✅Employee's Withholding Allowance Certificate 940 - Correct Answers ✅Employer's Annual Federal Unemployment (FUTA) Tax Return 941 - Correct Answers ✅Employer's Quarterly Federal Tax Return 944 - Correct Answers ✅Employer's Annual Federal Tax Return 4419 - Correct Answers ✅Application for Filing Information Returns Electronically (FIRE) Deferred compensation plans can be classified into two key groups - Correct Answers ✅Qualified and Non Qualified Plans Qualified Plans - Correct Answers ✅401(k) and 403 (b)

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Nonqualified Plans - Correct Answers ✅457 (b) A voluntary deduction must be - Correct Answers ✅Authorized by the employee Required deductions must take precedence over voluntary deductions - Correct Answers ✅True What does an employer use to calculate the amount to withhold for an irs tax levy? - Correct Answers ✅Take-home pay When does the IRS stop deducting a federal tax levy from an employees wages? - Correct Answers ✅The IRS issues a Form 668-D What does an employer use to calculate the amount to withhold for a creditor garnishment? - Correct Answers ✅Disposable pay The value of one withholding allowance for a weekly pay period is? - Correct Answers ✅$79. What is the easiest method to calculate federal income tax withholding on regular wages - Correct Answers ✅Wage-bracket

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Which is most common to calculate federal income tax for a computerized payroll system - Correct Answers ✅Percentage Method When using the optional flat rate method, which item is considered when making the calculation? - Correct Answers ✅Taxable wages When an employee is overpaid and the repayment occurs in the same year, the repayment requested is the employees - Correct Answers ✅Net overpayment. What form must a pensioner file to have input into the amount of federal income tax withheld? - Correct Answers ✅W-4P What is the employers social security tax rate in 2018? - Correct Answers ✅6.2% What is the maximum amount of social security tax than an employer must report and deposit for an employee in 2018? - Correct Answers ✅$15921. Optional Flat Rate Method (22%) - Correct Answers ✅Simply multiply the amount of the supplemental compensation by 22% and withhold that sum.

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Aggregate Method - Correct Answers ✅Add the supplemental wages to the regular wages for the most recent payroll period or the current payroll period. Subtract the tax already withheld from the regular wages and withhold the remaining tax from the supplemental wages. Mandatory Flat Rate Method - Correct Answers ✅When year to date supplemental wage payments to an employee reach $1,000,000.00 the tax rate required is 37% For child support if the employee supports a second family, the amount withheld cannot exceed what amount? - Correct Answers ✅50% (55% if in arrears) For child support if the employee does not support a second family the amount withheld cannot exceed what amount? - Correct Answers ✅60% (65% if in arrears) Creditor Garnishment - Correct Answers ✅Involves a court order to attach the employee's earnings in order to pay off a debt which the employee incurred. The Consumer Credit Protection Act - Correct Answers ✅Limits the amount of disposable earnings that can be garnished by creditors in a week.

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If the employee has disposable pay of more than $290.00 weekly, the maximum garnishment allowed under federal law is - Correct Answers ✅25% of the employee's disposable pay Currently three states have provisions for withholding state unemployment tax from employees in addition to the employer tax - Correct Answers ✅Alaska, New Jersey and Pennsylvania Explain the purpose of form 843, Claim for refund and request for Abatement - Correct Answers ✅Request that a refund or abatement be granted for certain taxes, penalties, interest, fees and some additions to taxes previously paid. Describe the basic components of so-called white-collar exemptions to wage and overtime laws. - Correct Answers ✅White collar exemptions (executive, administrative, and professional) under FLSA rules follow certain underlying guidelines, including duties and salary test: 1. salary basis and level test--a minimum salary is $455/week except for outside sales and certain professions such as doctors and teachers, and certain computer professionals who are paid $27.63/hour or more in straight-time pay for each hour worked and subject to a highly compensated employee test. 2. regardless of how much they are paid, employees who meet the exemption tests for their categories do not have to be paid overtime pay. 3. a Salary alone does not make an employee exempt. 4. Generally, exempt employees are the most

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important, highest-skilled workers in the company. 5. A title alone does not make an employee exempt. Explain the function of NACHA as related to the direct deposit method of payroll payment. - Correct Answers ✅NACHA (formerly an acronym for the National Automated Clearinghouse Association) is a nonprofit organization that acts as the self-regulatory body for the automated clearinghouse (ACH) process of electronic payments. In conjunction with its members, NACHA is responsible for the development, administration and governance of the ACH network which facilitates electronic payments such as the direct deposit of payroll earnings. Last month, an employee emailed her mother on the company's email, photocopied fliers for her church picnic at work, and used her work computer to update her resume. These services represent: - Correct Answers ✅de minimis fringes and are not taxable A retail sales clerk took advantage of the company's employee discount program to purchase clothes at 10% off the normal retail price. This service represents: - Correct Answers ✅This represents a qualified employee discount. The discount is 10% less than the cost to customers.

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An employee belongs to a professional organization. When his company pays his dues, the payment is: - Correct Answers ✅A working condition fringe An employees parking garage is two blocks away from his downtown office. It costs $275.00 per month to rent a stall there, but the employee doesn't mind because its convenient and his employer reimburses him for 100% of the cost. How much of his monthly parking is taxable? - Correct Answers ✅$15.00 Employer- provided parking is nontaxable up to $260. An employer provides an employee $300.00 a month in bus tokens so she can commute to work. How much of this expense is nontaxable? - Correct Answers ✅$260.00. Employer provided tokens for public transportation are nontaxable up to $260.00 a month. What federal taxes, if any must the salesperson's employer withhold for his personal use of the company vehicle? - Correct Answers ✅Social security tax and Medicare tax only For her ten years of service, an employee was given a gold necklace valued at $100.00. Is this taxable? - Correct Answers ✅The gift is tax- free. Most prizes and awards are taxable. One exception is qualified awards for length of service or safety.

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Under which type of plan are employee contributions subject to Medicare and social security tax? - Correct Answers ✅401(k), 403(b) and 457(b) Under which type of plan are employee contributions subject to federal income tax? - Correct Answers ✅Roth 401(k) An employer may provide all of the following features in a 401(k) plan except: - Correct Answers ✅Higher benefits for highly compensated employees Which plan applies to employees of public schools, colleges and universities, and public charities? - Correct Answers ✅Section 403(b) of the internal revenue code creates a tax sheltered retirement plan for employees of tax exempt non-profit organizations like schools, colleges, universities, hospitals or charities. Payroll must withhold federal income tax from: - Correct Answers ✅Roth 401(k) plans are subject to withholding for federal income tax, social security tax and Medicare tax. Are companies required to match employee contributions to 401(k) plans? - Correct Answers ✅No

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Which plan is specifically set up for government employees? - Correct Answers ✅457(b) plans cover employees of state , county and local governments. What benefits can be provided in a Section 125 Cafeteria Plan? - Correct Answers ✅Medicare insurance A record of daily transactions of a business is - Correct Answers ✅Journal What is the normal accounting flow? - Correct Answers ✅Transaction->Journal-> Ledger->Financial Statements A financial transaction is first posted in your organizations: - Correct Answers ✅The journal What is not a principle of customer service? - Correct Answers ✅Role plays What method are not used in practicing customer service skills? - Correct Answers ✅Arguing with customers

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An employee goes to the payroll department to ask a question about his paycheck. When he arrives, the desks are unattended, files are open, desk tops are covered with paper, and the floor has stacks of reports askew. Which customer service principle could be improved in this payroll department? - Correct Answers ✅Tangibles. These are the physical appearance of the department. An employee changed her United Way deduction. For two pay periods, the amount deducted was correct. Then, for the following period the amount doubled. When she called the payroll dept., the payroll coordinator told her that the situation would be corrected and gave her the option to have the amount added to her next paycheck or receiving a special check for the amount. Which customer service principle is being displayed here? - Correct Answers ✅Responsiveness. Correcting the situation promptly and giving the employee options as to how the problem can be corrected. A plant supervisor met with the payroll dept. to schedule a special pay run that would accommodate the shutdown for the holidays. After payroll committed to this date, they realized to meet the deadline it would require working the weekend. What customer service principle will be compromised if the deadline is not met? - Correct Answers ✅Reliability. This is providing what has been promised. On Thursday an employee receives new of a family emergency that requires him to take flight to his home that evening. Payday is not until

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Friday at 3 pm, but he needs his paycheck to pay for his flight,. When he contacts his payroll department and explains his situation, he is told a check will be ready for him when he stops by. What principle of customer service is this? - Correct Answers ✅Empathy. Understanding the employees situation. You receive a penalty notice from a governmental agency. The information is not readily available. What should you do first? - Correct Answers ✅Send a short letter to the agency stating that the issue is being reviewed. What should happen with a notice the payroll department receives from the IRS? - Correct Answers ✅It should be handled quickly You receive a letter of inquiry concerning an employee. What should you do? - Correct Answers ✅Follow your company's policy on the release of employee information. Payroll personnel should tell their neighbors about the following payroll information: salary history, termination reasons, pay level, non of the above - Correct Answers ✅none of the above The integrity of the data can be verified by: - Correct Answers ✅balancing and reconciliations

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Checking inputs or outputs against predetermined constraints is - Correct Answers ✅validity edit Payroll tax liability accounts should be reconciled at least weekly - Correct Answers ✅false Every month, all of the following records are reconciled EXCEPT: - Correct Answers ✅validity edits Payroll documentation accomplishes all of the following EXCEPT: - Correct Answers ✅ensure procedures are followed. When system-generated totals do not agree to batch control totals, what must occur? - Correct Answers ✅finding the cause and correcting the error. A computerized payroll system can help a payroll department accomplish all the following tasks EXCEPT: - Correct Answers ✅recognize the changes in laws and regulations If you need very rapid response time with minimal lag between input and output into your computer system, look for: - Correct Answers ✅real-time procesing

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Name three systems that commonly need to be interfaced with the payroll computer system - Correct Answers ✅HR, benefits, bank check acct, direct deposit, data collection sys, time/attend, general ledger, cost accounting Name two key advantages of automated interfacing - Correct Answers ✅data is entered once reducing labor time, less chance of error thank with manual systems, allows information to be shared on an as needed basis, more timely exchange of data between systems, more accurate data exchange Name two key advantages of integrated databases - Correct Answers ✅Help reduce data integrity issues, eliminate timing issues, eliminate the need for sending data from one system to another Name one way payroll managers can increase security through stricter internal control of the payroll staff. - Correct Answers ✅segregation of the job duties, rotation of personnel, restricted access to the system which of the following is the best method of guarding against phantom employees? - Correct Answers ✅physical payout Name two items that should be documented in the payroll department.

• Correct Answers ✅payroll policies, procedures, system and software user manuals, employee job description, file descritptions

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All of the following issues are concerns of external auditors EXCEPT: - Correct Answers ✅Efficiency of payroll procedures How can one or two person payroll departments guard against breaches of security? - Correct Answers ✅establish checkpoints with other departments( hr and accounting)so that no one department handles a function in its entirety In order to set up direct deposit of payroll, you need which three pieces of information? - Correct Answers ✅The employees bank routing number, the type of account (checking or savings) and the account number What is the correct chronological order for the following events associated with direct deposit? 1. Company Creates ACH file 2. Employee receives direct deposit 3. Company collects employees info 4. Originating financial information institution transmits data 5. Settlement through ACH - Correct Answers ✅3. Company collects employees info 1. Company Creates ACH 4. Originating financial information institution transmits data 5. Settlement through ACH. 2. Employee receives deposit in his or her bank account What does not regulate payments made by direct deposit? - Correct Answers ✅Local Laws

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Name two features found in systems providing employee self service? - Correct Answers ✅The ability to update personal data and the ability to view and print W2's lookback period - Correct Answers ✅the 12-month period that ends on June 30th of the prior year Safe Harbor Rule - Correct Answers ✅rule that determines if an employer has satisfied the deposit obligations by (a) having no shortfall (under deposit) that exceeds the greater of $100 or 2 percent of the amount of employment taxes required to be deposited and (b) having deposited the shortfall on or before the shortfall make-up date. EFTPS - Correct Answers ✅Electronic Federal Tax Payment System. Allows employers to make federal tax deposits electronically through the ACH network. Explain what is meant by a payment reissue - Correct Answers ✅Unclaimed wages are considered to be a form of abandoned property. Payments which are not cashed by the employee must be re-issued to the employee upon request. Discuss the reasons for the child labor law under the FSLA. - Correct Answers ✅The Fair Standards Labor Act are designed to prohibit

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children's employment in jobs that are detrimental to their health and safety. Discuss the requirements to change a workweek according to the FLSA.

• Correct Answers ✅The change initiated must be permanent and not changed. The change must not be made to intentionally avoid the overtime rules. Payroll liability accounts should be reconciled - Correct Answers ✅Monthly Business Continuity Planning - Correct Answers ✅outlines procedures for keeping an organization operational in the event of a natural disaster or network attack imputed value - Correct Answers ✅An estimate of the value of a good or service that is not sold in the marketplace and therefore does not have a market price. Escheat - Correct Answers ✅Unclaimed Wages How many hours in a day are minors allowed to work? - Correct Answers ✅No more than 3 hours per day/ 18 hours in a week

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When is form 941 due? - Correct Answers ✅Last day of the month following the end of the quarter Immigration and Reform Act - Correct Answers ✅Makes employers responsible for verifying the identity and employment eligibility of all employees. Used to verify Social Security number - Correct Answers ✅SSNVS What is the fair market value of a fringe benefit? - Correct Answers ✅The amount the employee would have paid a third party to buy or lease the fringe benefit How often should imputing occur? - Correct Answers ✅As often as possible In 2018 what is the mileage rate - Correct Answers ✅$0.545 per mile